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ECO3018 : Financial Economics

  • Offered for Year: 2019/20
  • Module Leader(s): Dr Hugh Metcalf
  • Owning School: Newcastle University Business School
  • Teaching Location: Newcastle City Campus
Semester 2 Credit Value: 10
ECTS Credits: 5.0


To develop an understanding of tasks facing participants in the bond and stock markets. To introduce students to the Efficient Markets debate. To introduce students to the practical side of financial market risk management, and to develop an understanding of competing views of financial market behaviour.

The module aims to familiarise students with the workings of the financial markets and financial decision making. It is designed to provide an understanding of investment decision making, the main financial models for valuing asset in conditions of certainty and uncertainty, and the importance of market efficiency. Asset values and rates of return will be examined together with the use of portfolios in risk diversification. The course will review the main asset pricing models and consider the problems encountered when testing them empirically. Finally the main theoretical issues that are currently outstanding in this field will be discussed.

Outline Of Syllabus

Lecture 1 - Introduction to Finance and Investment Appraisal.
Lecture 2 - Valuation and Portfolio Theory.
Lecture 3 - Asset Pricing Models.
Lecture 4 - Efficient Markets.
Lecture 5 - Bond Markets.
Lecture 6 & 7 - Options and Futures.
Lecture 8 - review and investment game report question and answer session

Teaching Methods

Teaching Activities
Category Activity Number Length Student Hours Comment
Guided Independent StudyAssessment preparation and completion131:0031:00N/A
Scheduled Learning And Teaching ActivitiesLecture82:0016:00N/A
Guided Independent StudyDirected research and reading125:0025:00N/A
Scheduled Learning And Teaching ActivitiesSmall group teaching31:003:00N/A
Guided Independent StudyIndependent study125:0025:00N/A
Teaching Rationale And Relationship

Lectures provide an overview of the main topics.
Seminars require students to present material that focuses on selected issues from lectures.
The investment game introduces teamwork and provides insights into the practicality of portfolio management.
Problem sets reinforce lecture material, and provide students with opportunity to monitor progress.

Assessment Methods

The format of resits will be determined by the Board of Examiners

Description Length Semester When Set Percentage Comment
Written Examination1202A70N/A
Other Assessment
Description Semester When Set Percentage Comment
Prof skill assessmnt2M30Group presentation and investment game
Formative Assessments
Description Semester When Set Comment
Oral Presentation2MFeedback on exam relevant seminar presentations
Assessment Rationale And Relationship

The unseen examination is designed to encourage study across a broad range of topics, whereas the seminar presentation allows in-depth study of a particular area of the syllabus. The investment game and report are focussed on more practically based issues.

Reading Lists